We also initiated a position in the common stock of White Mountains Insurance Group Ltd. (WTM), a Bermuda-based holding company whose principal businesses are conducted through property and casualty insurance and reinsurance subsidiaries. White Mountains Common was recommended for investment last year by John Mauro, a research analyst on Third Avenue's international team, when the company announced the sale of its Esurance subsidiary at a terrific price (about 2.5 times tangible book value) to the Allstate Corporation. White Mountains Common was subsequently purchased in the Third Avenue International Value Fund and discussed in that fund's July 31, 2011 shareholder letter. Impressively, White Mountains' tangible book value has increased at about 15% per year since 1985, with much of the growth driven by timely resource conversion activity (e.g., buying and selling of businesses), such as the recent Esurance sale.

In recent years, White Mountains' management has also been engaged in precisely the type of resource conversion activity discussed in Martin Whitman's Chairman's letter this quarter, e.g., repurchasing White Mountains Common. Since 2007, White Mountains has repurchased 37% of its outstanding common shares in a combination of open market repurchases, privately negotiated transactions and tender offers. Most recently, the company repurchased about 11% of its outstanding shares in a tender offer at $500 per share in March 2012 (versus a price of $523 per share on April 30, 2012). White Mountains Common was purchased during the quarter in the Fund at a modest discount to the company's March 31, 2012 book value per share of $560.

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